Who moved our inventory?

Hot market outpaces listings

If you’d like to sell your home in Madison Park, now is clearly the time.  In fact the opportunity seemed so good to my wife and me that we decided to sell.  Our house was on the market for exactly a week. Now we’re living in a Madison Park rental.

Our quick-turn experience was not particularly noteworthy among recent sellers of Madison Park real estate.  The area’s frothy market just doesn’t seem to be abating. There are simply too few listings for the many interested buyers waiting to pounce.

Winter is usually the slowest period for moving real estate; but even so, the inventory level in the neighborhood is shocking low. There are only 13 houses for sale in Madison Park as we go to press, and only two of these are located outside the neighborhood’s more-exclusive enclaves of Washington Park and Broadmoor.

With houses selling in record time the current listings are relatively fresh, with an average time on market of just 41 days.  Almost half of those listings, six of thirteen, have entered the market within the last month.  Meanwhile, there are just three condos for sale here.  That’s perhaps a record low.  For comparative purposes it’s worth noting at this same time of year in 2012, during the dead winter of the down market, there were 22 condo listings.

Here’s a quick snapshot of the housing that’s currently available for purchase in Madison Park, courtesy of Redfin:

Houses

Listings:  13
Median List Price:  $2,890,000
Median Sq. Ft.:  4,590
Median Price per Sq. Ft.:  $630
Average Days on Market:  41
Percentage with Price Reductions:  8%
New Listings:  6
Pendings:  7

Condos/Townhouses

Listings:  3
Median List Price:  $700,000
Median Sq. Ft.:  1113
Median Price per Sq. Ft.:  $629
Average Days on Market:  102
Percentage with Price Reductions:  66%
New Listings:  1
Pendings:  3

The accelerating sales pace of Madison Park’s real estate market is evident in several ways.  In 2014 the 80 homes that sold spent a coincidental 80 days on the market, on average.  Although more houses were sold in the previous year (103 to be precise), those 2013 sold homes remained on the market almost 20% longer: 98 days.  There was also a compression year over year of the average discount at sale compared to the original listing price.  The discount for 2014 was just 4.2%, compared to 6.9% in the previous year.

Here’s the breakdown of 2014 home sales:

Houses

Sales:  80
Median Sale Price:  $1,434,000
Average Sq. Ft.:  3,425
Average Price per Sq. Ft.:  $475
Average Days on Market:  80
Average Discount from List Price:  4.2%

Condos

Sales: 21
Median Sale Price:  $475,000
Average Sq. Ft.:  1,122
Average Price per Sq. Ft.:  $486
Average Days on Market:  78
Average Discount from List Price: 6.6%

Although for the full year the average days on market for sold houses was 80, that waiting period declined to just 40 days during the fourth quarter. During that final fall/winter period, 17 houses changed owners, more than half in fewer than 30 days (with seven of those going pending in two weeks or less).

The average price per square foot of sold houses increased 13% year over year, from $421 in 2013 to $475 in 2014 (click to enlarge):

I always caution that this kind of comparison can be misleading since the mix of houses sold (lower market versus upper market) is different from year to year, making it difficult to extrapolate given how small this market is.  But the trend is certainly in the right direction, and those who want to compute their own home’s value based on the market rate can use the $475 number as the best current approximation for the neighborhood.  House sales in 2014 ranged all the way from $254 per square foot to $947, proving an often-made point about the variability of housing choices in the Park.

Zillow uses current sales prices to compute a home value index for various Seattle neighborhoods. For Madison Park (exclusive of Broadmoor), the median home value is now just shy of $1 million, according to Zillow.  As you an see from the chart below (click to enlarge), Madison Park just about back where it was at the height of the market in 2007:

The most expensive house sold in 2014 was a 6,155 sq. ft. modernistic mega-house in Broadmoor at 1515 Parkside Drive, which sold for $4,200,000.  That works out to $682 per square foot.  The five-bedroom/five-bath home sold in just 14 days, which is not typical for Broadmoor, where 196 days was the average in 2014.  Twelve houses were sold in Broadmoor during the year, with a median sales price of $2,326,750.  One of these houses sold after 1128 days on the market and another after 907 days. Excluding these two outliers, the average on-market time for sold houses in Broadmoor was only 32 days.

1515 Parkside Drive East

In Washington Park the most expensive house sale was a 5,500 sq. ft. Georgian Colonial house at 1133 McGilvra Boulevard E.  This five-bedroom/3.5-bath home sold for $3,803,000, $689 per square foot.  The median price of the 26 houses sold in Washington Park last year was $1,512,500, and the average square feet of these was 3,730.  These homes sold in 74 days on average.

1133 McGilvra Boulevard East

For the rest of Madison Park, the 41 houses sold in 2014 averaged 2,794 square feet. At a median price of $1,200,000 this is an average of $470 per square foot.  These houses also had the lowest discount at sale from the original list price, just 2%.

And here’s a very interesting fact:  of the 80 houses sold in Madison Park last year, 34 of these (43%) sold at or above their original listing price.  Of the 23 houses initially priced at $1 million or less, 17 (74%) sold at or above list.  There must have been a bidding war for some of these.  For example, one house listed at $625,000 ultimately sold for $755,00 and another house that was listed at $629,000 sold for $765,000.  This kind of premium to list did not occur as often in the upper market, but a house listed at $1,850,000 did sell at $2,200,000, 119% of original list.

By the way, the least expensive house sold in Madison Park last year was a 1,450 sq. ft. two-bedroom on E. Madison Street, changing hands at $524,000.  There were 11 houses that sold for under $800,000 during 2014, but the days of a “cheap ticket to Madison Park” may be behind us.  There is only one house priced at under $1 million in today’s market—and that’s a two-bedroom 1923 cottage (shown at top) which is listed at $840,000.

Expect that baby to be gone soon.

[As always, thanks to Laura Halliday of Windermere Real Estate, for her assistance in compiling market statistics for sold homes, utilizing data from the Northwest Multiple Listing Service. Lower two photos courtesy of Redfin.]

Develop or not develop?

A quick trip around the neighborhood reveals that there is plenty of development currently in progress here, all of of it involving the construction of single-family residences.   In our part of town it’s unusual for there to be new office or multi-family developments underway.  This is principally due to the fact that the few blocks that are zoned for commercial or higher-density residential buildings have already been developed.   Here and there, however, there are some pockets of real estate that could be developed on a grander scale than what currently occupies the space.  Right now there are several separate plots in Madison Park that could see something other than single-family-residence development in the next year or so.

In general, higher-density residential buildings in Seattle can only be built on properties in areas specifically zoned for that purpose.  Madison Park has several areas near the Lake that are designated as available for lowrise development, which includes cottage housing, rowhouses, townhouses and three-story apartment buildings.   Most of the Park is designated either SF 5000 (meaning zoned for single-family residences on average 5,000 sq. ft. lots) or SF 7200 (which encompasses all of Broadmoor and most of Washington Park).  There are also some SF 9600 lots in the neighborhood, along the water south of E. Prospect Street and continuing south through Denny Blaine.  Very little commercial/retail zoning exists in Madison Park, with the area along E. Madison Street between 41st and 43rd Avenues constituting the vast bulk of these properties. Such development is also allowed along 42nd 43rd Avenues between E. Blaine and E. Newton Streets and along E. Madison Street between 31st and 33rd Avenues E.

With the recent sale of the building that housed Café Parco (1807 42nd Ave. E.) there was speculation that the property would be slated for development.  But as we previously reported, that is apparently not going to happen.  Rehabilitation is going to happen, however, and the space will house the personal office of a Madison Park resident who would like to both live and work here.

At about the same time the Café Parco space turned over, the neat 1929 brick building just to the south also changed hands.  It was purchased by third-generation Madison Park resident Brad Augustine, through a real estate holding company.   We quizzed him on whether he has any development plans for the property and he responded that he doesn’t plan to do anything more at the present time than remove an underground storage tank that’s on site.  The building currently houses two office tenants and Augustine says he will continue to manage the property as a commercial building.  His property management/development company, Madrona Real Estate Services, is known for developing some high-quality projects in the area.

One new low-rise development that definitely is on the drawing boards is slated for 2307 43rd Avenue E., the property across from Swingset Park from which a 1920s Craftsman-style residence was lifted and then barged away several years ago.  The property has sat forlorn since that time, awaiting a new owner with a plan.   That plan has now been filed and, assuming the City approves the project, a three-unit residential structure will be built on the site, including parking for six vehicles.

Finally with regard to potential neighborhood development, we note that the city’s Department of Planning and Development is apparently still deliberating over the proposal to build a six-unit apartment building at 2346 43rd Avenue E., the site of Madison Park’s only over-water single family residence.  We reported on the controversy surrounding this proposal when the plans were made public last January. To date, it looks like the review is continuing.  A check of the DPD website shows that the permit status for the project is nothing more advanced than “Application Accepted.”

[Illustration courtesy of E. Cobb Architects.]

No cheap ticket to Madison Park

Affordable houses are a thing of the past

A current snapshot of Madison Park’s real estate market reveals an extraordinary and perhaps unprecedented situation:  there is only a single house available for sale at under $1 million—and that one is priced at $900,000  Moreover, there is virtually no other inventory of housing available close to the million-dollar mark. The median price of a listed house in Madison Park is over $2.7 million. That’s the highest median value for listings we have seen in the more than five years we’ve been covering the neighborhood’s real estate scene.

Of the 19 single-family residences currently for sale here, there are only two that would pass as “affordable” (using the Madison Park definition of that term).  Those two are priced at $1,082,000 and $1,328,000 respectively.  You’ll have to pay almost $2 million for any one of the next four higher-priced houses on the active list, with the remaining 13 for-sale houses ranging in price from $2.4 million to $4.5 million.  And as might be expected, all of these houses are big.  There is only one residence on the market boasting less than 3,000 sq. ft., and the median size of the 19 homes is a whopping 4,200 sq. ft.

As is obvious to anyone who’s been paying attention, Madison Park has increasingly become “rarified” in recent years, bungalows making way for mega-houses. Based on current listings, it’s clear that the audience for single-family homes in Madison Park today is principally divided between the pretty wealthy and the very wealthy.  Of course Madison Park wannabes can still rent an apartment here or even purchase a condo at a relatively low price point.  Of the five condos currently available for sale, four range in price from $300,000 and $400,000, with the remaining condo listed at just under $1 million.  The median size of the five condos, however, is just 970 sq. ft.

This house at 825 Hillside Dr. is priced at the median for listed homes: $2,745,000.  

Here’s the state of the market as we head toward winter:

Houses

Listings:  19

Median List Price:  $2,745,000

Median Sq. Ft.:  4,200

Median Price per Sq. Ft.:  $653

Average Days on Market:  64

Percentage with Price Reductions:  26%

New Listings:  9

            Pending Sales:  4

Condos/Townhouses

Listings:  5

Median List Price:  $400,000

Median Sq. Ft.:  970

Median Price per Sq. Ft.:  $412

Average Days on Market:  172

Percentage with Price Reductions:  60%

New Listings:  1

Pending Sales:  1

House sales in the third quarter exhausted the available inventory of lower-priced abodes.  The median sales price of properties sold during the quarter was $1,475,000.  That is $1,300,000 (or 48%) less than the median price of houses currently available in the neighborhood: $2,745,000.  Seven of the 28 houses sold were under $1 million and only one house sold last quarter for more than the current median list price for houses in this market.

This is the breakdown of sales during the last quarter:

Houses

            Sales:  21

            Median Sale Price:  $1,475,000

            Average Sq. Ft.:  3,430

            Average Price per Sq. Ft.:  $431

            Average Days on Market:  48

            Average Discount from List Price:  1.7% 

Condos

            Sales: 7

            Median Sale Price:  $365,000

            Average Sq. Ft.:  949

            Average Price per Sq. Ft.:  $385

            Average Days on Market:  56         

            Average Discount from List Price: 4.0%

One of eight under-$1 million sales last quarter: 1031 32nd Ave. E.

Here’s a critical data point about third-quarter sales in Madison Park: houses sold in just 48 days on average, with condos taking only slightly longer to change hands (56 days).  Of the houses sold there were only two outliers in terms of time on the market.  No houses other than these took more than 60 days to sell, and the back story on one of the two is pretty good: the seller held out for the original list price and won the bet after 455 days.  That house sold for $2,250,000.  This was clearly not what’s referred to as a “motivated seller”.

And speaking of successful, we should include the sellers (eight of the 21) who sold their houses at their original list price or at a premium to list.  The biggest winners in that regard were two sellers who achieved more than an 8% premium on their houses, selling them in 6 and 8 days respectively.  Most houses that were sold were very well priced to market, with only two homes taking a double-digit hit: 12% in one case and 13% in the other.  These houses both sold in less than 30 days, proving either that there are some motivated sellers still left in the market or perhaps just some who are not keeping up on what’s possible in this inventory-challenged environment for sellers who are willing to wait.

Condo sales were also brisk (only one outlier among seven sales taking longer than 75 days), and the sold properties for the most part changed hands at or above their original asking prices.  The sales ranged from a 680 sq. ft. unit going for $335,000 to a 1,113 sq. ft. unit unloaded at $705,000.  The sold prices of condos, on average, achieved 99.88% of the final list prices of those properties, which is a pretty good statistic for any market.

[Photo at top: 1535 Parkside Drive E., a 7,020 sq. ft. mansion on a Broadmoor golf course fairway, is the most expensive house currently on the market, listed at $4,500,000. All photos via Redfin.]  

[Thanks to Laura Halliday of Windermere Real Estate for her help in compiling the sales data. Listing data courtesy of Redfin, using information from the Northwest Multiple Listing Service.]

A buyer's or a seller's market?

We got some pushback recently when we described Madison Park as an extreme “buyer’s market” on the residential real estate front—in other words, a “very cold” sales environment.   That was not an original conclusion on our part, however.  We were simply quoting the opinion of real estate website Zillow.

Not surprisingly, some readers disputed the notion that this is not a seller’s market; and they seem to have a point.  According to Merriam-Webster, a buyer’s market is “a market in which goods are plentiful, buyers have a wide range of choice, and prices tend to be low.”  That seems to be pretty much the opposite of the situation here, where at the end of the first quarter there were only 22 residential listings, hardly a “goods are plentiful” situation for a market that saw more than 100 listings during the downturn, with prices significantly lower than the current median sales price.

Here’s a capsule summary of the market at the end of the first quarter:

Houses

Listings:  22
Median List Price:  $2,595,000
Median Sq. Ft.:  4,105
Median Price per Sq. Ft.:  $625
Average Days on Market:  78
Percentage with Price Reductions:  9%
New Listings:  22
Pending Sales:  10

Condos/Townhouses

Listings:  5
Median List Price:  $475,000
Median Sq. Ft.:  1,025
Median Price per Sq. Ft.:  $463
Average Days on Market:  132
Percentage with Price Reductions:  60%
New Listings:  2
Pending Sales:  0

This market snapshot seems to prove we’re experiencing a seller’s market, which the dictionary defines as “a market in which goods are scarce, buyers have limited range of choice, and prices are high.”

We went back to Zillow to get a clarification of their reasoning, and here’s how the website defines its approach:  “Based on three metrics—sale-to-list price ratio, the prevalence of price cuts on home listings, and time-on-market—the market temperature provides information on the current balance of bargaining power between buyers and sellers in this neighborhood relative to other neighborhoods in the same metropolitan area.”  So the “hot/cold market” issue for Zillow has do with other variables than simply inventory levels.  In the case of Madison Park, Zillow showed 21.3% of Madison Park properties as selling below the list price earlier this year, with 26.7% of properties on the market having undergone a price cut from the point of the original listing.  The days-on-market metric, however, was not high at the end of the first quarter.

Here’s an overview of the first quarter’s sales activity:

Houses

Sales:  11
Median Sale Price:  $1,499,000
Average Sq. Ft.:  3,457
Average Price per Sq. Ft.:  $434
Average Days on Market:  80
Average Discount from List Price:  5.8%

Condos

Sales: 6
Median Sale Price:  $597,500
Average Sq. Ft.:  1,500
Average Price per Sq. Ft.:  $542
Average Days on Market:  81
Average Discount from List Price: 6.8%

An average rate of six sales per month is certainly not barn-burning performance, but for the market as a whole it’s clear that discounts are still being required of many sellers and price cuts are common.  So Zillow has a reasonable point to make about a “cold” buyer’s market in Madison Park, using their definition of what that means.

Most expensive listing, at $6,450,000: 3414 E. Shore Drive, Broadmoor

As we discussed last month, however, the market here can really be divided into two segments, each of which is exhibiting a different sales pattern.  Houses priced under $1,500,000 or so are selling quickly, may garner multiple offers, and are sometimes being sold at a premium from the original list price.  At the upper end of the market, however, price cuts and discounts are the norm and the waiting time is longer.  Hotter (a seller’s market) at the bottom, but colder (a buyer’s market) at the top.  Interestingly, Zillow has now removed the “Hot/Cold” thermometer from the Madison Park home-value page.  Perhaps the company’s methodology was just not in keeping with the generally accepted definition.

We noticed some other changes as well.  When we first reported on Zillow’s analysis of our market we were looking at the website’s Madison Park page in mid-March.  At that time, Zillow showed a 7.1% year-over-year increase in Madison Park home values and was projecting a 4.8% increase for the upcoming year.  The Zillow Home Value Index for Madison Park (Broadmoor excluded) then stood at $925,200 (the estimated median value of homes in the neighborhood).  Now, just two months later, Zillow shows a Madison Park Home Value Index of $964,300, an 11% increase in neighborhood values over the past year, and a one-year forecast of a 7.9% rise.

Things are looking up, at least in Zillow’s significantly revised opinion.


[Thanks to Laura Halliday of Windermere Real Estate for her help in compiling the sales data.  Listing data courtesy of Redfin, using information from the Northwest Multiple Listing Service. Lower photo courtesy of Ewing & Clark, via Redfin.]

Madison Park assessments up 12.1%

The new assessments are in the mail

Madison Park homeowners, along with their counterparts in Madrona and Leschi, should be receiving a notice from the King County Assessor's office in the next day or so. It's one of those good news/bad news situations, however. Some property owners may be gratified to see that the upward trend in house values is validated by a higher tax assessment on their home.  The 12.1% increase for this part of town ("Area 14" on the Assessor's map) is not the biggest increase in the City, but it's big enough.  And as assessments increase, there's always that nagging feeling that an increase in the tax bill must be on the horizon.

That's not necessarily the case, however.  Or perhaps a better way of describing the situation is to say that there's not a 1:1 correlation between the assessment increase on a home and the resulting property tax increase on that property.  The tax rate, as we've discussed here many times, is a product of other factors (principally tax levies and the independent budget actions of city, county and local service districts, such as library districts).  Nevertheless, having an increase in a tax assessment probably is a mixed blessing at best.

In 2013 the average home in our area was assessed at $986,200.  With the 2014 increase, that average tax value is now $1,105,600. This does not include the 574 properties that were significantly "improved" during the last year. The increase for those properties is necessarily higher than the standard 12.1% applied to non-improved homes.

Anyway, here's what you should be looking for in your mail in the next few days:

And if you'd like to appeal, here's where to start: King County eAppeals.  You've got 60 days to appeal from the date you receive the notice.

[Photo, lifted from Curbed Seattle, of a home in Madrona.]

The longer-term view of Madison Park real estate

2013 in context

As we often caution, sales statistics for Madison Park can be misleading given that ours is a pretty small market, with relatively few sales in each period.  Moreover, the mix of housing in the neighborhood is eclectic, to say the least.  Mansions abound in Broadmoor and Washington Park, with mega-houses now a feature in each of the three major sections of Madison Park.  Yet at the same time, there are plenty of less-imposing structures even in the more exclusive enclaves, and there’s a wide mix of construction styles throughout the neighborhood. Because of this hodgepodge, appraisers have reported that it’s more difficult to find good comps here than in most other Seattle neighborhoods.

Statistical information about Madison Park housing, therefore, should be looked at over the long term, rather than on a month-by-month or quarter-by quarter basis.   Perhaps a good way to evaluate the trend of housing values here is to look at sales price per square foot over a period of years.  The chart below shows the movement in value for single-family residences sold in the neighborhood since the height of the market, at least in terms of this variable, in 2008:

While Madison Park remains 21% below the high of $534.70 per square foot achieved five years earlier, it’s worth noting that there were almost twice as many total house sales in 2013 as there were in 2008, 103 versus just 56.  A wider mix of sales may skew the numbers in some respect.  Last year was a banner year for single-family homes sales in the Park, the 103 total sales being an increase of 32% over the previous year’s 78 sales.  In 2008 sales lagged at just 46.  Unfortunately, as we’ve chronicled in recent months, buyers during 2013 took most of the for-sale housing in Madison Park, and potential sellers did not replenish the inventory.  We note as an aside that there are fewer than 20 houses for sale in the market today.

What the price-per-square-foot chart tells us is that by this measure the market has been bumping along at about the same level for the past four years.  The fact that 25% of the 2013 sales were of houses priced at less than $1 million may have had the effect of pushing the average price per square foot down for the year.  Lower-priced homes do not command the same per-square-foot price as the more expensive abodes.

The most expensive house sale

In 2013, almost as many houses changed hands at the $2 million or more level as were sold at the under $1 million level: 21 in total.  Six of these were over $4 million, the most expensive being a “Georgian colonial…with sweeping, jaw-dropping views” (to quote the sales brochure), along McGilvra Boulevard in Washington Park, which sold for $4.8 million.  The house, built in the final year of the last century, has 5,270 sq. ft., with five bedrooms and five bathrooms.  Its $904 price per square foot is nearly double the average for the market as a whole, which pretty well demonstrates our earlier point.

Average days on market for houses sold in 2013 was just 98.  Forty houses sold in 30 days or fewer, including three houses priced at more than $3 million. Each of them sold within a week.  On the other hand, some sellers really held out for the long term, one home selling after 869 days (and at a significant discount) and two others selling in over 600 days.

As is always the case, there were differences in the average sales prices for houses located in Washington Park and Broadmoor versus the rest of Madison Park.  The differential between these more exclusive sections and the less well heeled was $200,000 to $300,000.

Broadmoor had the highest median sale price, at $1,520,000.  This is basically even with 2012 and down 8% from 2009. Broadmoor’s high-water mark was a $2 million median sale price in 2007.  21 houses changed hands in this most-exclusive enclave last year, a 250% increase over the dismal six sales recorded in 2012. The most expensive house sold for $4.3 million.  Only one home sold for under $1 million, though almost 50% of total Broadmoor sales were for houses priced under $1.5 million.  That’s what passes for affordable in the context of Broadmoor.

Washington Park, meanwhile, recorded a median sales price of $1,405,000.  Houses took a bit longer to sell than those in Broadmoor (121 days versus 98 days for Broadmoor), but sellers took a slightly lower discount from list price than those in the gated community.  The least expensive house sold in Washington Park during 2013 was a $580,000 cottage, built in 1941, located on Lake Washington Boulevard E. A total of 11 houses sold for $1 million or less in Washington Park, all of them on 33rd Avenue E. or further west, an area that’s considered to be Madison Valley by many residents at or near the top of the hill in Washington Park.

In the rest of the Park, the median house sold for $1,212,500 during 2013. This is a big increase over previous years and is almost as high as the $1,250,000 median price at the height of the market in 2008. The average days on market was 77 and the average price per square foot was $412.88. The most expensive home sold was a secluded 6,280 sq. ft. house on the 1900 block of 37th Place E., built in 2000. It went for $3,495,000.

The most expensive condo sale was in this building

There were also 39 condos sold in Madison Park during 2013, with a median price of $445,000, average square feet of 1,141, and an average price per square foot of $454.60.  The highest priced condo sold last year was a 1,400 sq. ft. unit in a condo building on 43rd Avenue E., across the street from Swingset Park, which sold for $1,150,000.  Condos spent an average of 136 days on the market, though one notable exception was a condo that that languished for 1885 days---owned apparently by someone those in the industry would probably characterize as “an unmotivated seller.”

[Thanks, as always, to Laura Halliday of Windermere Real Estate for her help in providing sales statistics from the Northwest Multiple Listing Service.  Current market data provided by Redfin.]

Madison Park: not hot, but certainly exclusive

When the Seattle Times ran a story earlier this year on the Puget Sound neighborhoods with the hottest real estate markets, Madison Park did not make the list. Trendy neighborhoods such as Belltown and Beacon Hill saw huge spikes in median home values during 2013, a stunning 24% in the case of Beacon Hill.  Madison Park’s appreciation last year was about 7%. Not bad, but certainly not on a par with many Seattle neighborhoods that are considered “affordable.”  Beacon Hill, for example, had a median price of only $320,000 for houses solid there in 2013. Madison Park, by contrast, recorded a median price of $1,350,000 for the 103 single-family homes sold here.

But in spite of our not being “hot,” Madison Park has proven over time to be an excellent neighborhood in which homeowners can benefit from long-term gains on their residential property purchases, assuming their properties were not bought at the height of the market. Real estate website Zillow reports that Madison Park had a 7.1% increase last year in our median home value, based on neighborhood sales. The Zillow Home Value Index for a median Madison Park home (single family residences and condos combined) now stands at $925,200 (the median being the point where half the houses have a higher value and the other half a lower value). Unfortunately, Zillow excludes Broadmoor in its calculations, which somewhat distorts the overall picture for Madison Park, since Broadmoor represents about one fifth of neighborhood single-family housing. Nevertheless, Zillow’s calculations are useful for taking a long-term look at appreciated values in the area.

Zillow’s records go back to 1996, when Madison Park’s median house value was just $266,300.  Five years later, in February 2001,the Zillow Home Value Index for the neighborhood had risen to $570,900 (up 114%); and at the ten-year mark in February 2006 the median home here was valued at $839,400 (up an additional 47%). The height of the market in Madison Park came in September 2007, when a median home topped $1 million for three months, peaking at $1,005,700 in September. The decline from that point was swift, with the median value hitting $715,200 in February 2011, before the recovery finally began.

From the low point, according to Zillow, Madison Park’s homes have appreciated 29% overall. That seven-year increase may seem modest relative to the go-go years around the turn of the century, but it brings the Zillow Home Value Index to just 8% below the neighborhood’s all-time high.  Zillow is predicting a 4.8% increase in values during the coming year, which will place the median list price per square foot at $529. Today’s $505 per square foot is 59% higher than the $317 for the city as a whole, according to Zillow.

The takeaway from all of this is that Madison Park has already lived through the cycle of rapid appreciation that certain other Seattle neighborhoods are beginning to experience, post Great Recession.  The now-rarified nature of Madison Park precludes this kind of ongoing frothiness, though Madison Park’s many virtues will continue to make the place a sought-after place to live for those who can afford it. Gentrification continues apace, with cottages coming down and mega-houses going up. All of this puts the neighborhood further out of reach for typical Seattle families, lessening the size of the audience for homes in the Park.  Even rentals here are astronomical compared to Seattle overall ($2,950 per month at the median in Madison Park versus $1,615 for the city as a whole, says Zillow).

From This: a 42nd Avenue E. Cottage

Proving Madison Park’s exclusivity, Zillow ran some numbers for us earlier this year comparing Madison Park’s pricing today with that of other Seattle neighborhoods. Madison Park’s $925,200 median value came in third of the 99 neighborhoods Zillow analyzed, topped only by Laurelhurst at $1,011,800 and Windermere at $943,800. If only single-family residences are included, however, Madison Park tops the list at a median value of $1,242,300 (Lower Queen Anne comes next at $1,115,700, followed by Windermere and Laurelhurst, the only other Seattle neighborhoods with median house values exceeding $1 million).

To This: a 42nd Avenue E. Mega-House

Madison Park’s year-over-year increase in its median single-family home value, 12.6%, was exceeded by the annual increases of 29 other Seattle neighborhoods (21.7% for Highpoint and more than 17% for both Windermere and Laurelhurst, for example). Further reinforcing the conclusion that Madison Park is at the top of the exclusive zone is the fact that the current median list price per square foot here is now $660, a 38.8% increase over the same point last year. There’s no inventory left in Madison Park, and what’s available is expensive (just 11 houses currently on the market, Broadmoor included, with list prices ranging from $1.4 million to $3.5 million).

Zillow currently rates Madison Park’s real estate market as “Very Cold” (in other words, an extreme buyer’s market).

[Upper photo: 1510 37th Avenue E., courtesy of Windermere Real Estate via Redfin.]

Fourth Quarter Real Estate Report

2315 38th Avenue E.: sold at list price in five days

Who moved our inventory?

As the new year began, Madison Park exhibited all the aspects of a "hot" real estate market except for one. It's hard to sustain a vibrant market when there are virtually no houses for sale; and at the end of January there were just nine Madison Park listings. That  represents one and a half months of inventory, based on fourth quarter 2013 sales levels.  Those who have been waiting for the right moment to put their house on the market, however, will be heartened to learn that houses are now selling in record time and they're selling, in many cases, at the initial asking list price---or even higher.  Those are both significant changes from what was true when last year began.

Here's a rundown of the market's sales activity in the fourth quarter:

Houses

Sales:  18
Median Sale Price:  $1,590,000
Average Sq. Ft.:  3,651
Average Price per Sq. Ft.:  $432
Average Days on Market:  63
Average Discount from List Price:  6.8%

Condos

Sales: 3
Median Sale Price:  $435,000
Average Sq. Ft.:  1,515
Average Price per Sq. Ft.:  $585
Average Days on Market:  218
Average Discount from List Price: 7.7%

For the most part, the six houses that on average sold per month during the fourth quarter moved quickly from "listed" to "sold."  Excluding the two houses that changed hands above $2 million, the remaining 16 lower-priced houses sold in an average of just 39 days. Five of these properties were closed in fewer than ten days.

Moreover, five of the 18 house sellers had the pleasant experience of quickly receiving offers at or above the list price. One house sold in seven days at a 12% premium to list.  The average discount from original list price of 6.8% reflects the fact that some sellers were not as fortunate.  One house originally listed at $3,350,000 sold during the quarter at $2,400,000 (a 28% discount from the initial list price) after 280 days on the market.  Another house, originally listed at $1,689,000, sold for $1,400,000 (a 17% discount) after only 49 days on the market.

The condo market was not as frothy during the fourth quarter, but the average days on market showed a decline in spite of the fact that one of the three condos sold 476 days from listing.

2053 42nd Avenue E.: pending sale seven days from list

It appears to be an excellent time to sell a house in Madison Park, with potential buyers having a rather limited set of options to choose from.  This was the state of the market at the end of January, based on NW Multiple Listing Service (NWMLS) data provided through Redfin:

Houses

Listings:  9
Median List Price:  $1,795,000
Median Sq. Ft.:  3,540
Median Price per Sq. Ft.:  $507
Average Days on Market:  192
Percentage with Price Reductions:  66%
New Listings:  1
Pending Sales:  3

Condos/Townhouses

Listings:  4
Median List Price:  $435,000
Median Sq. Ft.:  950
Median Price per Sq. Ft.:  $459
Average Days on Market:  137
Percentage with Price Reductions:  50%
New Listings:  1
Pending Sales:  1

The number of new listings in January was anemic, and that situation seems to be holding for February as well, with just a couple of new houses coming onto the market. With pending sales now exceeding new listings, there's an obvious imbalance.  The three pending houses on the market, by the way, were each listed below $1 million and received offers in under ten days.  The houses that have not sold, for the most part, are much pricier, with four of the nine listed at $2,500,000 or more.

Madison Park's market mirrors the state of the market for Puget Sound as a whole, with a lack of inventory being the number one problem for buyers and real estate professionals alike.  But for the region as a whole, new listings are actually up this year, according to the NWMLS, while in Madison Park listings are significantly lower than at this point last year. There were ten new listings in January 2013 and just two new listings this year. There were 28 houses on the market at this time last year, and there are just nine this month.  For the overall Puget Sound region there is a 4.5 month supply of inventory on hand (and for King County, inventory of 2.5 months), while in Madison Park we're down to 1.5 months of inventory.

Got a house you want to sell?

4100 E. Highland: a new February listing at $2,795,000

[Thanks to Laura Halliday of Windermere Real Estate for her help in compiling the sales data.  Listing data courtesy of Redfin, using information from the Northwest Multiple Listing Service. Photos provided through Redfin, courtesy of Windermere Real Estate and Coldwell Banker (middle photo).]

Waterfront project riles some neighbors

Shoreline permit application under review 

The owners of the only Madison Park house that actually sits in Lake Washington have filed an application to build a three-story, six-unit apartment building on the dry-land portion of their property at 2346 43rd Avenue E., north of Swing Set Park. Their 2,600 sq. ft. single-family home, built in 1947, sits over water on pilings near the shoreline and is connected to land by a narrow wood walkway.

The lot covers 16,053 sq. ft., only about a quarter of which is dry land, and is 38 feet wide.  Owners Amanda and Matt Rosauer propose keeping the house as is and demolishing their carport, which fronts the sidewalk on 43rd, to accommodate the new multi-family structure.  Below-grade parking is planned for the six new residential units.

The new building, designed by E. Cobb Architects, Inc., will be a LEED-certified, modernistic, concrete/stained- wood/coated-metal structure rising as high as 40 feet above the street level on one side, including the roof enclosure with its stair/elevator access and rooftop planters. The proposed apartments will range in size from 615 to 1050 sq. ft. The final design of the building will ultimately depend on which of three proposed footprints the City approves for the project, ranging from 1,753 sq. ft. to 2,247 sq. ft., depending on the size of required setbacks. Setbacks are the spaces between the property lines and the structure. Two of the three design alternatives require setback “adjustments” (meaning exceptions to City code) on either the south side, or on both sides of the property.

The Rosauers’ application for a Shoreline Substantial Development permit was submitted in early December, prompting several neighboring property owners to register objections. The height of the building, the potential impact on neighborhood parking patterns, and the size and density of the project relative to views are the neighbors’ principal objections.

“This street/area is already overcrowded with multiple dwellings [and] finding a parking spot is difficult,” says one neighboring homeowner in a letter to the City. “This proposed project will block and destroy the view and ruin the ambience in the neighborhood. The house currently on the property…is a non-conforming use. This proposal is an outrageous insult to the neighborhood.”

Another neighboring homeowner echoed concerns about the view, writing, “The applicant’s proposed three-storey apartment building will negatively impact our unit by blocking the afternoon sun which we so enjoy.”

Lawyers for the homeowners of Lakeshore West condominiums (which sits just north of the subject property) commented that the proposed development is on a property that is nonconforming, meaning that it violates current rules for shoreline development. They argue that the City “should require removal of the nonconforming, overwater residence as a condition to the consideration of any new development of the property.”  On behalf of the condo owners, they further objected to requested setback changes and the fact that there are only six on-site parking spaces being provided for the seven residential units (including the existing house).

The lot is zoned for a multi-family structure. In fact, the property is unusual for buildings along 43rd Avenue E. in that it is the only one with a single-family residence on it. The two lots immediately to the south contain a duplex and two single-family residences respectively.  The Lakeshore West building to the north is an overwater complex consisting of over 50 units.  Almost all of the waterside multi-family structures on this stretch of 43rd Avenue E. are nonconforming overwater developments. Due to shoreline management rules currently in play, none of them could be built today. The new apartment project, however, is being proposed for a property where the new structure could conform to current standards. One of the ironies of this story is that some homeowners in non-conforming buildings are opposed to the creation of a new conforming building on the street.

In their filings with the City’s Department of Planning & Development (DPD), the architects for the project state, “The proposed building incorporates and utilizes the positive architectural characteristics of the neighborhood while also mitigating between the drastic and inconsistent difference in scale and character of the two immediate adjacent neighboring buildings.”  One of the objectives they list for this project is: “Develop the site to increase density and provide residential opportunities that reinforce the positive aspects of the current neighborhood, street, and shoreline.”

Of the three alternative schematics provided by the architects to the DPD, the building that requires no "adjustments" is the one that almost certainly would be the least attractive from the street side.

Based on comments from DPD in the public record, it appears that the City is less likely to approve a setback "adjustment" that negatively impacts the residential property to the south, but DPD may be more open to granting a variance on the north side of the property, which borders the Lakeshore West parking lot.  If this "adjustment" were approved, the structure would be similar to the “preferred alternative,” with living spaces in the building opening onto 43rd Avenue E.

While there is a fair amount of negative commentary on the record from immediate or nearby neighbors, the developer himself has been circumspect to this point, adding little to what was submitted to DPD.  When we asked for some input for this article, owner Matt Rosauer responded this way in an email: “The property is zoned to allow additional development and while we respect the right of neighbors to comment, the proposal meets zoning and shoreline requirements and represents a quality design.”

Rosauer is certainly familiar with the City’s process for approving developments, as least as they apply to commercial properties.  He is a principal at a downtown development company which was the developer of several high-profile Seattle projects. Rosauer and his wife purchased their Madison Park in-lake property in 2009.

As part of the review process for shoreline development permits of this kind, DPD may decide to hold a public hearing; but according to Tami Garret, DPD’s planner for this project, the process will just have to take its course.  For a timeline, she referred us to the DPD website, which indicates that a design review period of five to six months is typical for shoreline permits, with six to ten months being the norm for “complex/controversial” permits, though this application may not fall into that category.

Public comments on this project are being accepted by the City until February 7.

[Architectural renderings courtesy of E. Cobb Architects, Inc. Aerial photo from the public record relative to the permit application process.  Lower photo from King County Assessor Records.]